A heat pump is a heating and cooling system that moves heat from one place to another instead of generating it from scratch. In winter, it pulls heat from outdoor air (or the ground) and delivers it inside. In summer, it reverses direction and acts like an air conditioner, pulling heat out of your home. This single piece of equipment replaces both a furnace and a central AC unit, and it does so using a fraction of the electricity that traditional electric heating requires.
How a Heat Pump Moves Heat
A heat pump doesn’t burn fuel. It uses a refrigerant, a fluid that cycles between liquid and gas states, to carry heat energy from one location to another. The process works in four stages through a closed loop.
First, the refrigerant enters a compressor as a cool, low-pressure vapor. The compressor squeezes it, raising both its pressure and temperature until it becomes a hot gas. That hot gas flows into a coil called the condenser, where it releases its heat to the surrounding space (your home, in heating mode) and cools down enough to become a liquid. The liquid then passes through an expansion valve, which drops the pressure sharply and makes it very cold. Finally, the cold refrigerant enters the evaporator coil, where it absorbs heat from the outdoor air (or ground) and evaporates back into a gas, restarting the cycle.
The key to a heat pump’s versatility is a component called the reversing valve. Controlled by your thermostat, this valve flips the direction of refrigerant flow so the indoor and outdoor coils swap roles. In heating mode, the outdoor coil absorbs heat and the indoor coil releases it. In cooling mode, the indoor coil absorbs heat from your rooms and the outdoor coil dumps it outside. One system, two directions.
Types of Heat Pumps
Air-Source Heat Pumps
The most common type, an air-source heat pump, pulls heat from outdoor air. Even in cold weather, there’s usable thermal energy in the air. The system has a visible outdoor unit (similar to a central AC condenser) and one or more indoor components. Installation is relatively straightforward compared to other types, which makes air-source units the default choice for most homes.
Ground-Source (Geothermal) Heat Pumps
Ground-source heat pumps extract heat from the soil, which stays at a more stable temperature year-round than outdoor air. Instead of an outdoor unit, they use underground pipework installed in trenches or boreholes. This makes them more efficient in extreme climates, but installation is significantly more expensive and invasive because of the excavation required. They do need a large indoor unit to house the equipment.
Ducted vs. Ductless Systems
Once you’ve chosen a heat pump type, the next decision is how it delivers conditioned air to your rooms.
A ducted heat pump connects to your home’s existing ductwork, pushing heated or cooled air through vents in every room, just like a traditional furnace and AC setup. The indoor equipment typically sits in a basement or utility closet, and all the hardware is hidden inside walls and ceilings. This is the best fit for larger homes that already have ducts in good condition, or new construction where ducts can be planned from the start.
A ductless mini-split, by contrast, pairs one outdoor unit with one or more wall-mounted indoor air handlers. Each handler controls the temperature in its own room or zone, with no ductwork needed. This is ideal for older homes without existing ducts, room additions, or spaces where running ductwork would be impractical. The tradeoff is that the wall-mounted units are visible, which some homeowners dislike. The upside is zone control: you can heat or cool only the rooms you’re using, which saves energy.
Why Heat Pumps Use Less Energy
The efficiency advantage of a heat pump comes down to a simple ratio called the Coefficient of Performance, or COP. It measures how much heat energy you get out for every unit of electricity you put in. A standard electric heater, like a baseboard or space heater, converts electricity into heat at roughly a 1:1 ratio. One kilowatt of electricity produces about one kilowatt of heat. Its COP is 1.0.
A heat pump, because it moves existing heat rather than creating it, routinely achieves COPs between 3.0 and 4.9. That means for every 1 kW of electricity consumed, the system delivers 3 to nearly 5 kW of heat. In practical terms, a heat pump uses 3 to 5 times less electricity than an electric boiler or baseboard heater for the same amount of warmth. Even in very cold conditions, when efficiency drops, a heat pump typically maintains a COP of 2.5 to 3.0, still far better than direct electric heating.
Cold Climate Performance
A common concern is whether heat pumps work in cold winters. Older models struggled below freezing, but modern cold climate heat pumps are specifically engineered for it. To earn the ENERGY STAR Cold Climate designation, a heat pump must maintain at least 70% of its rated heating capacity at 5°F and achieve a COP of at least 1.75 at that temperature. That’s still 75% more efficient than electric resistance heating, even in bitter cold. If you live in a heating-dominated climate, look for that Cold Climate label.
Efficiency Ratings to Know
When shopping for a heat pump, you’ll encounter two main efficiency ratings. SEER2 measures cooling efficiency over an entire season (higher is better). HSPF2 measures heating efficiency over a season (also higher is better). To earn the ENERGY STAR label, a split-system heat pump needs a minimum SEER2 of 15.2 and an HSPF2 of at least 7.8. Cold climate models require an HSPF2 of 8.1 or higher for ducted systems and 8.5 or higher for ductless. Higher-rated units cost more upfront but lower your monthly electricity bills.
Federal Tax Credits
Under the Inflation Reduction Act, you can claim a federal tax credit of up to $2,000 per year for installing a qualifying heat pump. This is separate from up to $1,200 available for other home efficiency upgrades like insulation and windows, meaning a combined annual maximum of $3,200 across all efficiency improvements. The home must be located in the United States and used as a residence, including second homes. Renters who make eligible improvements also qualify.
Starting in 2025, eligible air-source heat pumps must be recognized as ENERGY STAR Most Efficient. There are two qualification pathways: one for cold climate (heating-dominated) applications and one for cooling-dominated or dual-fuel setups where the heat pump pairs with a furnace. You can choose either pathway regardless of where you live.
Refrigerant and Environmental Impact
Heat pumps use refrigerants that, if leaked, contribute to global warming. The refrigerant used in most systems through 2024, R-410A, has a global warming potential (GWP) of 2,088, meaning one pound released traps as much heat as 2,088 pounds of carbon dioxide over a century. Starting in 2025, new heat pumps are transitioning to lower-impact refrigerants. R-454B has a GWP of 466, and R-32 comes in at 675. Both represent a significant reduction. If you’re buying new, systems manufactured in 2025 or later will use one of these newer refrigerants by default.
Maintenance Basics
Heat pumps need consistent but simple upkeep to run efficiently. The most important task is checking your air filter monthly and cleaning or replacing it as needed. Dirty filters restrict airflow and force the system to work harder. Beyond that, have the evaporator and condenser coils cleaned periodically to prevent buildup that reduces heat transfer. When the system runs in cooling mode, it produces condensation, so the condensate drain should be inspected to make sure it’s not clogged. Most of the filter work you can handle yourself, while a yearly professional tune-up covers the coils, refrigerant levels, and electrical connections.